Ten brands that may disappear in 2013

Provocative predictions range from Avon to Oakland Raiders

By

DouglasA. McIntyre

This story has been updated to reflect the ending of an investigation into Avon Products’ communications with securities analysts.

Each year, 24/7 Wall St. identifies 10 important American brands that it predicts will disappear within a year. This year’s list reflects the brutally competitive nature of certain industries and the reason companies cannot afford to fall behind in efficiency, innovation or financing.

American Airlines, in 24/7 Wall St.’s view, will disappear in 2013 because of its inefficiency. It was the premier carrier in the United States for almost 30 years — surviving through periods when most other carriers went bankrupt. However, it lost its critical advantage of scale when Northwest merged with Delta
DAL, +0.37%
and Continental merged with United
UAL, +0.40%
Within two years, American became a midsized carrier.

Research In Motion
US:RIMM
may be the best example of an innovative company that lost its edge. As a result, it could disappear in 2013. Five years ago, RIM was the only smartphone company of any size, and it had almost the entire corporate market. But it made a fatal mistake in failing to adapt its technology for consumer use. In June 2007, Apple
AAPL, +1.72%
launched the iPhone, and the rest is history. (RIM, though, has enjoyed a rare bask in the sun this week. See: RIM’s sales surprise doesn’t erase doubts.)

Pacific Sunwear
US:PSUN
no longer has the capital to compete. The retailer will be gone by the end of 2013. In the company’s most recent 10-Q, it said one of its biggest risks was running low on capital and not meeting financial obligations.

24/7 Wall St. made many accurate calls last year, but the speed with which some of them came true was surprising. MySpace was sold by News Corp.
NWS, -1.47%NWSA, -0.68%
publisher of MarketWatch, less than a week after last year’s list was published.

Saab

Saab, an entry on this list in 2011, subsequently filed for bankruptcy.

Several additional 2011 nominees are no longer around, either. Saab filed for bankruptcy only five months after 24/7 published last year’s predictions. The car company has been sold yet again to an investment group called National Electric Vehicle Sweden, probably for little more than car parts.

In November 2011, Ericsson dumped its half of the Sony Ericsson mobile-phone business, apparently aware of something that Sony
SNE, -1.38%
has yet to realize — the smartphone industry is owned by Apple and Google’s
GOOG, +0.42%
Android-run phones. Similarly, Yum Brands
YUM, -0.74%
dumped A&W because its sales were minuscule compared with those of flagship brands KFC and Taco Bell.

A few of the companies we said would vanish are still operating. American Apparel is now a penny stock. Nokia
NOK, -0.17%
is another company 24/7 still predicts will go away soon. The former Finnish heavyweight just fired 10,000 employees, or 20% of its workforce.

Bad calls were also made. Sears
SHLD, +0.28%
and Sony Pictures are still operating in essentially the same form they were a year ago. Kellogg’s
K, -0.95%
Corn Pops and Soap Opera Digest are doing just fine.

This year continues a methodical approach of deciding which brands to include on the list of brands that will disappear. The major criteria are:

1.) Rapid fall-off in sales and steep losses.

2.) Disclosures by the parent of the brand that it might go out of business.

3.) Rapidly rising costs that are extremely unlikely to be recouped through higher prices.

4.) Companies that are sold.

5.) Companies that go into bankruptcy.

6.) Companies that have lost the great majority of their customers.

7.) Operations with rapidly withering market share.

Each brand on the list suffers from one or more of these problems. Each of the 10 will be gone, based on the given criteria, within 18 months. On that basis, and on the following pages, are the 10 companies 24/7 Wall St. predicts will disappear next year.

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